Global economist Nouriel “Dr. Doom” Roubini questions Bitcoin’s (BTC) scalability and security but acknowledges that the cryptocurrency could be a store of value.
In an interview with Yahoo Finance correspondent Julia La Roche, the famed economist, who has called crypto the “mother or father of all scams and bubbles,” now says that Bitcoin could serve as a store of value after all.
Unlike thousands of other cryptocurrencies, Roubini admits that Bitcoin at least has an algorithm that controls its supply and keeps it from decreasing in value.
“It’s maybe a partial store of value because unlike thousands of other [cryptocurrencies] that I call ‘shitcoins,’ it cannot be so easily debased because there is at least an algorithm that decides how much the supply of Bitcoin raises over time. Because for most of those other ones, literally, it is done ad hoc, and they’re being debased faster than what the Fed is doing.”
Despite his latest evaluation of the king coin, Roubini still will not label Bitcoin as a currency, pointing to its volatility and lack of security and scalability as deal-breakers barring its entry into the category.
“I have pointed out that cryptocurrency is a misnomer. Because for something to be a currency, you have to be a unit of account. Nothing is priced in Bitcoin or any other cryptocurrency. You have to be a single numerator and with so many tokens you don’t have a single numerator. You have to be a scalable means of payment, and with Bitcoin you can make only five transactions per second. With a Visa Network, you can make 25,000. And you have to be a stable store of value that is not very volatile.”
Roubini says central bank digital currencies (CBDCs) are the future, not Bitcoin. He expects that CBDCs will soon crowd out digital payment systems and will make even bank accounts and cryptocurrencies like Bitcoin obsolete.
“And remember, many central banks, starting now with the Chinese one, the Swedish, [and] even the Eurozone are starting to think about creating a central bank digital currency. Once you have a central bank digital currency, every individual can use an account with the central bank to do payments.
So, not only you don’t need crypto, you don’t even need Venmo. You don’t even need a bank account. You don’t even need the check. And the big revolution we’re gonna see in the next three years is gonna be central bank digital currencies. They’re gonna be crowding out digital payment systems, or in [the] private sector, starting with cryptocurrencies that are not really currencies.”